Human embryonic stem (ES) cells were suggested to be an important tool in transplantation medicine. However, they also play a major role in human genetics. Using the gene trap strategy, we have created a bank of clones with insertion mutations in human ES cells. These insertions occurred within known, predicted and unknown genes, and thus assist us in annotating the genes in the human genome. The insertions into the genome occurred in multiple chromosomes with a preference to larger chromosomes. Utilizing a clone where the integration occurred in the X chromosome, we have studied X-chromosome inactivation in human cells. We thus show that in undifferentiated female human ES cells both X chromosomes remain active and upon differentiation one chromosome undergoes inactivation. In the differentiated embryonic cells the inactivation is random, while in the extra-embryonic cells it is non-random. In addition, using a selection methodology, we demonstrate that in a minority of the cells partial inactivation and XIST expression occur even in the undifferentiated cells. We suggest that X chromosome inactivation during human embryogenesis, which coincides with differentiation, may be separated from the differentiation process. The genetic manipulation of human ES cells now opens new ways of analyzing chromosome status and gene expression in humans.